EU allows limited aid for airlines


The European Union has authorised limited government aid for European airlines driven deeper into crisis by the September 11 attacks in the US.

The Commission said member states could meet the cost of higher insurance premiums until the end of the year, pay for extra security measures and compensate airlines for losses directly incurred from the four-day closure of US airspace after the terror attacks.

But it ruled out blanket state aid for national carriers, many of which were facing painful restructuring decisions before the September 11 attacks.

Mindful of the $15 billion aid package granted by Washington to US airlines, EU Transport Commissioner Loyola de Palacio said the Commission measures were a first step in responding to the emergency circumstances, and further moves could follow if the crisis deepened.

"Competition should not be distorted. We want to avoid European airlines becoming weaker with respect to their American counterparts," she said.

"No direct cash, no aid, no state subsidies. On that matter, we've said 'no' very clearly. We've said 'yes, compensation for the four days' loss of American airspace', but we've said 'no' to any other type of aid," she said.

De Palacio put no figure on EU aid measures, which will depend on member states.